On March 11, 2025, the Financial Crimes Enforcement Network (FinCEN) issued a geographic targeting order (GTO) to combat illicit activities and money laundering by cartels and other criminal actors operating in certain portions of seven Texas or California counties near the southwestern border of the United States. The GTO drastically reduces from $10,000 to $200 the dollar threshold at and above which the filing of currency transaction reports (CTRs) is required. The GTO will become effective 30 days after it is published in the Federal Register and may remain in effect for 180 days, unless it is renewed for a longer period of time.
Importantly, the GTO does not apply to insured depository institutions or entities regulated by the SEC or CFTC but only to the following types of money services businesses (as defined by federal law):
- Dealers in foreign exchange.
- Check cashers.
- Issuers or sellers of traveler’s checks or money orders.
- Providers of prepaid access.
- Money transmitters.
- The U.S. Postal Service.
- Sellers of prepaid access.
Moreover, the GTO only applies to such businesses if they are located in the following ZIP codes and counties:
- Imperial County, California: 92231, 92249, 92281, and 92283.
- San Diego County, California: 91910, 92101, 92113, 92117, 92126, 92154, and 92173.
- Cameron County, Texas: 78520 and 78521.
- El Paso County, Texas: 79901, 79902, 79903, 79905, 79907, and 79935.
- Hidalgo County, Texas: 78503, 78557, 78572, 78577, and 78596.
- Maverick County, Texas: 78852.
- Webb County, Texas: 78040, 78041, 78043, 78045, and 78046.
The GTO does not officially alter covered money services businesses’ obligation to file suspicious activity reports (SARs), and such businesses must continue to file SARs when appropriate for transactions exceeding the established thresholds (which are as low as $2,000). However, the GTO “encourages the voluntary filing of SARs” to report transactions conducted to evade the new $200 reporting threshold. Additionally, the GTO clarifies that a covered business must satisfy “Know Your Customer” requirements, including the requirement that the specific identifying information (e.g., the account number of the credit card or the driver’s license number) used in verifying the identity of the customer shall be recorded on the CTR. The mere notation on the CTR of “known customer” or “bank signature card on file” is prohibited.
Under federal law, a GTO may be issued if the Secretary of the Treasury finds, upon his own initiative or at the request of an appropriate federal or state law enforcement official, that reasonable grounds exist to require financial institutions to conduct additional recordkeeping and reporting to carry out the purposes of the Bank Secrecy Act. In this instance, the director of FinCEN (as the Treasury Secretary’s authorized designee) found that such reasonable grounds exist because the action is being taken “in furtherance of Treasury’s efforts to combat illicit finance by drug cartels and other illicit actors along the southwest border of United States.”
Before this latest GTO, FinCEN most recently utilized GTOs in a widespread effort to identify the natural persons behind shell companies purchasing real estate in certain counties and major metropolitan areas in California, Colorado, Connecticut, Florida, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New York, Texas, Washington, Virginia, and the District of Columbia. Those GTOs have been renewed multiple times and remain in effect until at least April 2025.
The GTO is consistent with the Trump Administration’s commitment to crack down on organized crime and other illegal activities along the southwestern border, and indeed, Treasury Secretary Scott Bessent issued a statement strongly supporting the GTO. However, despite its targeted nature, it imposes a greater regulatory burden on certain financial services industry participants and thus may seem contrary to the Administration’s stated priority of easing that burden.
The GTO’s impact on crime at the southwestern border and the full extent of the additional burden it will impose on affected companies remain to be seen, and while existing internal controls and processes likely can be fine-tuned to meet these new obligations, affected companies nevertheless will need to ensure their policies and procedures are updated to comply with them. Moreover, industry participants will want to closely monitor the extent to which local and federal law enforcement find the GTO beneficial, and whether for that reason or others the Trump Administration seeks to expand the GTO’s scope in the future.
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If you have any questions, or would like additional information, please contact one of the attorneys on our Financial Services team or one of the attorneys on our White Collar, Government & Internal Investigations team.